Bridges and Culverts

Giant Steps

What do you get when DeWalt buys Porter-Cable and Delta, and Milwaukee joins Ridgid and Ryobi?

What do you get when you combine gray and yellow? Graylo? How about when you add a bold red to orange and blue? I guess what I really want to know is, "What do you get when DeWalt buys Porter-Cable and Delta, and Milwaukee joins Ridgid and Ryobi?"

Rick Schwolsky, Editor-in-Chief

We've already reported on these two third-quarter 2004 acquisitions that have everyone guessing the answers to both questions–surely within the companies themselves, too. I can only hope this means we'll get continued quality from the brands that were acquired and continued selection and service for tool buyers loyal to these product lines. What insiders speculated might happen over the next decade–that the tool industry will boil itself down to the Big Four companies–took two giant steps within one quarter last year.

Consolidation is buzz-wording its way through the tool industry. This isn't new in the construction world. National home builders have been acquiring market share for years as the fastest path toward growth, which is ultimately driven by shareholder demand. Mega-brand building product companies like Masco set the standard a long time ago by acquiring huge families of companies in a wide range of categories. Tool companies fuel their own growth in the same way.

While this may be an inevitable result of evolution, tool manufacturers still have a choice in how they handle their brands and those they acquire. I can't imagine that this is an easy process, or that the choices are clear-cut. In fact, I wish the executives and managers at all the brands involved good luck in dealing with it. But if the best ideas, engineering, and technologies from the individual brands can move more easily into our hands because of the combined resources of the consolidated companies, that would be a good outcome. This is the tricky part though, because if the individual brands continue to "compete" in the market against their new kissin' cousins, how does the parent company treat them?

Competition has driven every historical breakthrough, technological revolution, and modern innovation since the Stone Age, and it is at risk and being publicly reshaped in real time. The power generated by this massive reorganization will change the playing field forever, and I'm afraid that entrepreneur-inventors, who over time have been the source of creative genius in our industry, will find themselves on the sidelines, unable to enter or stay in a game that has gotten too big and is moving too fast for them.

Nobody can turn the tide against consolidation, so we'll have to hope for the best in terms of competition and its implications regarding features and pricing. My hope is that it brings more creativity strengthened through stronger investment in research and development, deeper practicality broadened through closer contact with more tool users, diverse features driven by shared product development and manufacturing breakthroughs, and finally, competitive pricing supplied by the efficiencies and purchasing power that these mega-brands should be able to leverage along the way.